Why Trump’s ‘war’ on USPS impacts working families: EPI

Economic Policy Institute Economist Monique Morrissey joins Yahoo Finance's Kristin Myers to discuss the concerns over cost-cutting at USPS.

Video Transcript

KRISTIN MYERS: Well, the president continued his attacks on the US Postal Service today. In an interview this morning, he highlighted that the Democrats' desire for $3 and 1/2 million for mail-in voting and $25 billion for the Post Office was essentially a non-starter. In that interview, he said that not only would the Post Office be unable to do mail-in voting without those funds, but that he had no interest in giving it to them.

So for more on the war against the Post Office and its impact on working families, we're joined now by Monique Morrissey, Economic Policy Institute economist. So Monique, I want to start first on the elections and some of the notes that you have been making. The president's saying that he doesn't want to give money to the Post Office for mail-in voting. I'm wondering if you can share with us your thoughts on how that's going to be impacting the integrity of the election in November.

MONIQUE MORRISSEY: It will have a huge impact. I mean, during the pandemic, obviously, people are going to be relying a lot more on mail-in voting. We already have universal mail-in voting in many Western states. But when people are afraid of voting in-person, obviously, they're going to rely much more on mail-in.

And the president has hinted that he was opposed to it. But then what he told Fox Business News is he's openly trying to suppress the mail-in vote, even though much of his administration, much of his cabinet, himself, have voted absentee themselves.

KRISTIN MYERS: So a lot of criticism has been thrown at Louis DeJoy. He's the postmaster general and he's also a Trump ally. A lot of folks have been saying that he is purposely sabotaging the Post Office.

I'm wondering, however, if you could respond to the pushback to that criticism that the Post Office essentially has been hemorrhaging money for quite some time and that something had to be done to stem the bleeding. So what Louis DeJoy is doing isn't necessarily a sabotage, but attempting to stem the bleeding, so to speak.

MONIQUE MORRISSEY: That's absolutely not true at all. So technically on paper, the Postal Service has been losing money since a 2006 law was passed and the Great Recession followed right afterwards. But the reason had nothing to do with the fundamentals of how it operates. But it had to do with the fact that Congress required the postal service to fund 75 years worth of retiree health benefits in 10 years.

And the reason it did that is kind of a convoluted story. But at the time, they were trying to paper over their own deficits, Congress was. So they wanted a lot of money coming from the Postal Service, which is an off-budget entity, to the federal-- into the federal budget. And so they made this onerous requirement, which made the Postal Service look for many years like it was hemorrhaging money.

Also, the Postal Service is a pub-- it's not supposed to make money. It's supposed to break even. It has a public service mandate. It has to deliver to every house. And it's been also restricted in how much it can raise postage.

So in other words, it's really not that there's something-- it's a very efficient operation. It would be making money if you just loosened a couple of those things. I'm not suggesting that we should raise postage rates right now because during a recession that's a very bad idea. But I am suggesting that the Postal Service, like other companies that have been directly affected by the pandemic, should get a little bit of relief.

KRISTIN MYERS: So you say that the war on the Post Office, as I've been calling it, is harming working families. I'm wondering if you can talk us through how, especially given the makeup of the employees at the USPS.

MONIQUE MORRISSEY: Well, the Postal Service has, for many years, been a lifeline to the middle class, especially for military veterans and African-American workers. And this was hard fought, by the way. There's an entire book written about how African-Americans were locked out of the good jobs in the Postal Service and had to fight to get those jobs.

These jobs are middle class jobs. They're solidly middle class jobs. They're not lavish. They're hard jobs. They're jobs of responsibility.

But they pay a bit more than the typical job for somebody who's got a high school degree or maybe an associates degree, but doesn't have a bachelor's degree or higher education. So, like most government jobs for non-college workers, are a little bit better. They have better benefits. Often private sector jobs for non-college workers don't have a pension, don't have health care benefits. And Postal Service jobs do.

So it's been especially important for African-Americans who have-- the wealth gap is enormous between Blacks and whites in this country. And one way to fix that if you're an African-American family, you're trying to stay in the middle class, is to get a job with decent benefits that make sure that you're not going to get bankrupted because of medical costs or-- and that you have a secure retirement. And so that was what the Postal Service represented for many years, and still to this day.

But there are increasingly pressures on those wages and benefits and the ben-- and so we've seen this. This has been sort of a longstanding thing. The Postal Service has been shrinking. The pay premium for working for the Postal Service has been shrinking. They're still decent jobs.

They don't really by themselves pay even for supporting an average family. You still need to have a dual earner. I mean, it's not like these are lavish jobs. But they're secure. And so that's what makes this especially tragic.

KRISTIN MYERS: I want to also address that as well, to while it's not-- these moves aren't just harming folks, but they also are helping some corporations. How much of a boost is this to postal rivals?

MONIQUE MORRISSEY: Well, it's huge. And in fact, back to the earlier point about the jobs, what's been happening for a long time now is that the Postal Service has been sort of hollowed out from within by outsourcing. And very strangely, the Postal Service is required to rebate any cost savings that it has to companies that do things like presort or deliver packages or mail closer to the destination. So the Postal Service doesn't even actually benefit from this kind of outsourcing.

But low-wage employers who do that kind of work definitely benefit, because they are paying sometimes minimum wage or barely above it. They're using the same technology, or worse technology than the Postal Service. In fact, the Postal Service often invented the technology and then it gets borrowed by the private-sector companies.

But the private-sector companies compete on low wage. And the Postal Service is pretty much obliged to give them these big rebates. And so that has driven this sort of hollowing out of the Postal Service.

And I should mention that the current postmaster, which is rather shocking, owns $30 million in stock in his former employer. He was CEO of a company that did third-party logistics, including for the Postal Service, was one of its main clients. It got sold to another company. He still owns a huge amount of stock in that company.

And his company was known specifically for that. It promised other employers-- I mean, that they would do the outsourced work and without a union and at low wages. That was their MO. So obviously, the postal worker unions are alarmed by having him now head up the Postal Service. And he stands to directly benefit from things that are going on with the Postal Service that he's trying to implement.

KRISTIN MYERS: Well, I think this is the first time that the US Postal Service has gotten so much attention as a piece of this political war. Monique Morrissey, economist at the Economic Policy Institute, thanks for joining us.

MONIQUE MORRISSEY: Thank you very much.